ONLY ANSWER NUMBER SIX PLEASE

h concepts; differential analysis for analyci PR 24-5A Product pricing using the cost-plus approach concepts; differential aceepting additional business Display Labs Inc. recently began production of a new p required the investment of $1,800,000 in assets. The costs of producing and selling units of flat panel displays are estimated as follows: roduct, flat panel displays, which selling 9,000 Fixed costs: Variable costs per unit: Factory overhead Selling and administrative expenses180,000 $90 20 40 35 $185 $360,000 Direct materials Direct labor Factory overhead Selling and administrative expenses Total Display Labs Inc. is currently considering establishing a selling price for flat panel displays. The president of Display Labs has decided to use the cost-plus approach to product pricing and has indicated that the displays must earn a 20% rate of return on invested assets. 6. Assume that as of August 1, 2012, 5,000 units of flat panel displays have been pro- duced and sold during the current year. Analysis of the domestic market indicate 4,000 additional units normal product price determined under the product cost concept. On August 3, Dis- play Labs Inc. received an offer from Video Systems Inc. for 1,500 units of flat panel displays at $225 each. Video Systems Inc. will market the units in Canada under its own brand name, and no selling and administrative expenses associated with the sale will be incurred by Display Labs Inc. The additional business is not expected to affect are expected to be sold during the remainder of the year at the the domestic sles of that panel displays, and the adional units could be produced using existing capacity a. Prepare a differential analysis of the proposed sale to Video Systems Inc. b. Based on the differential analysis in part (a), should the proposal be accepted